The purpose and significance of personal income tax are as follows:

1. Organizational fiscal revenue. In countries with high per capita GDP, personal income tax is not only one of the important tax sources, but also has a wide range of tax sources. The collection of personal income tax can ensure stable fiscal revenue.

2. Adjusting income distribution will help achieve social equity. With economic development, problems such as the widening gap between the rich and the poor will gradually emerge and may become negative factors affecting social stability. Imposing progressive taxes on personal income can reduce the degree of unfair social distribution and ease social conflicts.

3. It has the function of automatic stabilizer. Since personal income tax generally adopts a progressive tax rate, during economic prosperity, tax increases faster than personal income, which can automatically curb inflation; conversely, during economic depression, tax revenue decreases faster than personal income decreases. Fast and can stop the deflationary trend.

4. As a direct tax, personal income tax helps to cultivate and enhance citizens’ tax awareness.

About the calculation method of personal income tax:

As for the withholding and prepayment method for resident individuals, the State Administration of Taxation clearly stated in the "Announcement on the Comprehensive Implementation of Several Collection and Administration Convergence Issues of the New Personal Income Tax" , when the withholding agent pays wages and salary income to resident individuals, the withholding tax shall be calculated according to the cumulative withholding method, and the withholding declaration shall be made for all employees and in full on a monthly basis;

The withholding agent shall For income from labor remuneration, author remuneration, and royalties paid to resident individuals, personal income tax shall be withheld and paid in advance on a per-time or monthly basis, and a "Personal Income Tax Withholding Return" shall be submitted to the competent tax authority.

If the annual withholding and prepayment tax amount is inconsistent with the annual tax payable, the resident individual shall handle the annual settlement and settlement of comprehensive income with the competent tax authority from March 1 to June 30 of the following year. More refunds and less compensation.

As for the withholding method for non-resident individuals, the "Announcement on the Full Implementation of Certain Collection and Administration Coordination Issues of the New Personal Income Tax" points out that the wages and salaries of non-resident individuals shall be deducted from the monthly income by RMB 5,000. The balance after yuan is the taxable income; for income from labor remuneration, author remuneration, and royalties, the amount of each income is the taxable income, and the monthly converted non-resident individual monthly tax rate table is used to calculate the tax payable. .

Among them, the income from labor remuneration, author remuneration, and royalties is the balance after deducting 20% ??of the expenses. The amount of income from royalties is calculated at a reduced rate of 70%.

Legal Basis

Article 1 of the "Individual Income Tax Law of the People's Republic of China"

Have a domicile in China, or have no domicile and pay tax alone An individual who has lived in China for a total of 183 days in a year is a resident individual.